What Happens To Mortgages During War?

What Happens To Mortgages During War

We all know that war is a very huge thing and it can have a wide impact on a country’s economic structure but in today’s article we will particularly talk about mortgages. What Happens To Mortgages During War? Have you ever wondered about this? I am sure you did and that is why you are here so without wasting any further time let’s jump right into this interesting topic.

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What Happens To Mortgages During War?

So basically there are two answers to this question the first one justifies how a war can affect your mortgage payments and the other one talks about how the war will affect the process and functioning of mortgages.

So if you are a normal civilian, we have a piece of bad news for you because if your house got destroyed even during the war times you are still expected to pay the mortgage to the bank even under bad circumstances.

While if you are an active military service member, the rules are different for you. All active military servants residing in the US are protected by “SCRA”, which stands for Servicemembers Civil Relief Act, and all active military servants residing in Uk are secured through “SMIR” which stands for Service Mortgage Interest Relief Scheme.

Let’s understand both of them.

Servicemembers Civil Relief Act (SCRA)

Basically, the servicemembers civil relief act is a federal law designed to help military members in consumer and legal situations. The government takes care of all the mortgages so the military service member can devote all their time to their duty. It helps to relieve all the stress from their families.

It covers many different things like mortgage payments, credit card debt, taxes, lease termination, eviction, life insurance protection, and many more things.

All active duty service members, reservists, and members of the National Guard are covered under the SCRA.

Their mortgage status is “deferral” which is different from the status of a normal civilian. So, they never lose their houses.

They are also free from bad credit records and many other related issues because they serve the country.

Note: The person should be an active member, Ex-members are not covered.

SCRA features 5 major protections for military members when it comes to mortgages, property, and debt which are mentioned below:

  • Protection 1 states that the interest rates can be reduced to a maximum of 6% on any pre-service loans.
  • Protection2 states that the military servant can get legal protections on Default Judgments in Civil Cases.
  • Protection 3 protects and states that the property can’t be repossessed.
  • Protection 4 the member has Mortgage Protection Against Foreclosure, meaning a lender cannot recover an unpaid debt by taking ownership of the property.
  • Protection 5 states that there can be a Termination of Residential Housing and Auto Lease Without Penalty during war times.


Service Mortgage Interest Relief Scheme (SMIR)

The scheme basically resembles the above scheme, in this scheme the government provides financial help to military service members who are serving overseas, and it includes mortgages in it.

Basically, it is a relief for military members who are deployed overseas for more than 30 days, the amount of the relief is usually equal to the amount of mortgage interest paid, and it can go as high as £200,000.

It helps and supports military members financially and ensures that the military members do not get penalized for serving their country overseas. In addition to this scheme, the government may provide some additional help to military service members such as housing allowances, family support payments, and travel allowances.

Now let’s talk about some additional details related to SMIR:

  • SMIR is not available to every military servant: Remember that only military members who are serving overseas for more than 30 days are eligible for this scheme.
  • SMIR is a tax relief: SMIR is a tax relief which means that you may still have to pay the mortgage interest but it will be refunded at the end of the year.
  • Discussion with Lender: If you are serving overseas you will still need to contact your lenders to discuss things.


So if you are not a military service member you don’t have many choices but you don’t need to be sad, we have also listed some of the best tips which you can follow to protect your mortgage during the war, please have a look!

Also Read: Can you mortgage an auction property?

How to protect your mortgage during wartime?

During the time of war, the economy of a country usually slows down. This can lead to layoffs of jobs and less money coming in, which can make it difficult for anyone to keep up with their mortgage payments. Here are a few tips for protecting your mortgage during wartime:

Talk with your lender: If you are unable to make payments or you are having trouble during the payment process don’t be shy and reach out to your lender and explain everything. The lender will surely help you by suggesting payment plans or deferment.

Get assistance from a financial advisor: A financial advisor will assist you in the process of creating a budget and the advisor will also figure out ways to cut costs so that you can easily free up more money to put toward your mortgage payments.

Think about Refinancing: If interest rates have dropped since the last time you got your mortgage, refinancing can help you to lower your monthly payments and make it easier to keep up with them during some tough financial times.

Try to Make extra payments whenever possible: If you get a bonus at work or some extra money from another source, put it towards your mortgage instead of spending it on other things. This will help you pay off the loan faster and reduce the amount of interest you pay over time.

Always Keep up with your insurance coverage: If something unfortunate happens and you are unable to make your mortgage payments, having proper insurance coverage can help protect your home from foreclosure.


So in short, the answer to the question “What Happens To Mortgages During War” is simple, you will most likely still need to pay your mortgage payments even during the war but the government of the country can help by introducing new schemes and relaxations for normal civilians during a war, while the civilians suffer with mortgage payments the military service members can get away with it because they serve the country. Please don’t get jealous bro 🙂


1. What happens to the mortgage if the house is destroyed during the war?

Unfortunately, the bank will still expect you to pay the mortgage and most of the time your insurance would not cover that as well so the only solution to this problem is seeking help from the government.

2. What happens to mortgages during a World War?

As we already told you, if you are a normal civilian, you are still expected to pay the mortgage to the bank under normal circumstances. While if you are a military servant you might have a chance to escape the mortgage payments.

3. Is money safe in the bank during the war?

It depends on the intensity of the war, if the war reaches its high point, the economic stability of any country will suffer. No one can guarantee that the money is 100% safe, the government can seize money in certain situations, the possibility is low but it can happen that’s why most people trade expensive things like gold in exchange for money to be double safe. Although, due to advanced technological developments in the field of banking most of the time money is safe during low-mid intensity wars.

4. What happens to my money in the bank if we go to war?

During wars, for example, World War 2, The processing in Banking goes on as usual but enemy assets and accounts related to it are seized; that means the accounts which are located in the area of the enemy are closed and the money is withdrawn from them by the government.

5. Do Mortgage Rates Go Down During War?

Generally, if a big conflict happens, the government tries its best to maintain the stability of the mortgage rate during the war but if the war becomes aggressive the mortgage rate can go high or low as the economic structure becomes weak during war and mortgage rates become volatile.

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